2025-11-11 21:03:35
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First-party data from millions of cars, vertically integrated factories, and a cost per mile expected to collapse over time. The market has rewarded that vision with a $1.4 trillion valuation—a bet on a future where human drivers disappear, car ownership fades, and every vehicle becomes a computer on wheels.
Now contrast that with everyone else.
Even if you combined the market caps of every company in rideshare and delivery, you’d still fall short of half a trillion dollars. And for good reason: today’s on-demand platforms are expensive, low-margin, and constrained by human supply.
So it’s fair to ask: Is there any autonomy upside for demand aggregators?
The market doesn’t think so. Uber trades at roughly 22x trailing free cash flow, a metric that has tripled in the past two years.
And yet, the latest Uber–NVIDIA partnership may point to a different outcome.
NVIDIA will supply the “L4 brain” and AI training computers. Uber brings the global ride-and-delivery network, driving data, and fleet-management infrastructure. Together, they’re building an AV Technology Ecosystem to bring “Uber-ready” autonomous vehicles to market. It’s the next step in Uber’s quiet AV expansion, already spanning 20+ partners. You can already order a Waymo on Uber in cities like Atlanta and Austin.
Why should you care? Because this partnership shifts autonomy from speculative to deployable. If Uber can integrate AVs at scale, its moat expands—from network effects and driver liquidity to data, logistics, and operational leverage. That could reprice what a rideshare business is worth.
The big idea: Uber’s alliance with NVIDIA marks a turning point. The question is not whether Tesla will dominate autonomy—but whether the platforms that control demand today can capture a meaningful share of the value. The ripple effects touch valuations, competitive advantage, and the entire timeline of disruption.
Today at a glance:
🚖 Uber: AV Aggregation Theory.
🛵 Grab: The Superapp Angle.
🚘 Lyft: Pragmatic Follower.
First, let’s look at where Uber is today. Q3 revenue rose 20% Y/Y to $13.5 billion ($240 million beat). A large one-off tax benefit distorted the net profit for the quarter, so it’s best to focus on operating profit.
Gross Bookings (the total dollar value spent by end users on Uber apps) surged 21% Y/Y to $49.7 billion (accelerating).
🚗 Mobility +20% Y/Y to $21.0 billion with a 30.6% take rate.
🛵 Delivery +25% Y/Y to $18.7 billion with a 19.2% take rate.
🚚 Freight flat Y/Y at $1.3 billion.
Monthly Active Platform Consumers (MAPC) rose 17% to 189 million.
Trips grew even faster at 22% Y/Y to 3.5 billion.
Despite the large top-line beat, adjusted EBITDA (up 33% Y/Y to $2.3 billion) and operating income of $1.1 billion both missed expectations, with management citing one-off legal and regulatory charges of $0.5 billion for the shortfall. It would have been a large beat without this temporary headwind. Free cash flow remained robust at $2.2 billion.
Looking ahead, Uber provided a mixed Q4 forecast. Gross Bookings guidance (+19% Y/Y to ~$53 billion) came in ahead of consensus, but the Q4 adjusted EBITDA forecast of (+34% Y/Y to ~$2.46 billion) fell $30 million short of analyst expectations. The trend remains very much alive, with adjusted profitability outpacing revenue growth and margins expanding.
The company prepares to shift its profit reporting to adjusted operating income (or adjusted EBIT) in 2026, a more conservative measure than adjusted EBITDA since it doesn’t exclude the DA part (Depreciation and Amortization). This approach makes sense since Uber has become a more mature, profitable business.
CEO Dara Khosrowshahi outlined six strategic growth areas:
Deepening engagement (more trips per user).
Hybrid future (human drivers + AVs).
Local commerce (grocery & retail).
2025-11-08 23:02:45
Welcome to the Saturday PRO edition of How They Make Money.
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Today at a glance:
🦎 Berkshire: Buffett’s Final Call
🍟 McDonald’s: Deals Are Working
📲 Qualcomm: Handsets Rebound
📱 Arm: AI Data Center Bet Pays Off
🌐 Arista Networks: AI Targets Soar
🇩🇰 Novo Nordisk: New Guidance Cut
🧬 Amgen: Core Franchises Boost
💉 Pfizer: Cost Cuts Drive Beat
🪶 Robinhood: Crypto Miss
☕️ Starbucks: Turnaround Takes Hold
🛖 Airbnb: International Strength
🏨 Marriott: US Softness Persists
🏎️ Ferrari: Pricing Power Shines
🔒 Fortinet: SASE Soars
🇰🇷 Coupang: Triple-Digit Taiwan Growth
⚡️ Axon: AI Growth Pain
🐶 Datadog: Broad-Based Growth
🎮 Take-Two: GTA VI Delayed Again
🔲 Block: Gross Profit Acceleration
🌮 YUM Brands: Pizza Hut on the Block
🎤 Live Nation: Global Growth Fuels Record
✈️ Expedia: B2B Jumps
📢 HubSpot: AI & Multi-Hub Traction
📺 The Trade Desk: Kokai Fuels a Beat
🎨 Figma: $1 Billion Run Rate
📌 Pinterest: Weak Outlook
🍞 Toast: ARR Tops $2 Billion
💬 Twilio: Growth Accelerates Again
🌎 Global Payments: Genius Momentum
🧬 Tempus AI: First-Time EBITDA Positive
👑 DraftKings: Guidance Slashed
👻 Snap: AI Partnership Fuels Blowout
🦉 Duolingo: Missing the Streak
💻 Paycom: AI Efficiencies Continue
💊 Hims & Hers: Novo Talks Relaunched
🗞️ NYT: Subscriber Growth Accelerates
⚡️ Celsius: Turning Into a Monster
🏴 Klaviyo: Retention Rebounds
🔥 Match Group: Hinge Acceleration
🌊 Digital Ocean: AI Demand Accelerates
🚲 Peloton: Profitability Uptick
🍽️ Tripadvisor: “Experiences-Led” Reorg
🎓 Docebo: Core Growth Masked
🍿 AMC: Box Office Softens
Berkshire Hathaway’s operating earnings improved to $14.4 billion in what marks Warren Buffett’s final earnings call as CEO. Revenue grew 2% to $95.0 billion, while net earnings rose 17% to $30.9 billion.
The operating profit jump was driven almost entirely by the insurance underwriting business, where earnings more than tripled to $2.4 billion due to a mild catastrophe season. Profit gains at BNSF (+5%) and manufacturing (+8%) also helped offset a 9% decline at Berkshire Hathaway Energy.
The cash hoard swelled to a new record of $382 billion, up from $344 billion in June. Berkshire’s cautious stance continued, with no share buybacks for the fifth straight quarter and net equity sales of $6.1 billion. The company has been a net seller of stocks for the 12th consecutive quarter.
With Buffett set to step down as CEO at year-end, successor Greg Abel inherits the massive war chest and a stock that has underperformed since the retirement announcement. However, Abel’s first major move was announced just after Q3 closed: a $9.7 billion deal to buy OxyChem, signaling a new catalyst and the first significant deployment of the cash pile.
McDonald’s Q3 revenue rose 3% Y/Y to $7.1 billion ($10 million miss), and adjusted EPS was $3.22 ($0.11 miss). The profit miss was driven by $91 million in one-time restructuring and transaction charges related to its South Korea and Israel businesses.
Global same-store sales continued their rebound, rising 4% (beating estimates), and US comps grew 2% (also a beat). US growth was driven by positive check growth from successful promotions like the Snack Wrap and various value bundles.
International Operated Markets (+4%) and International Developmental Licensed Markets (+5%) once again outperformed the US, with strong results in Germany, Australia, and Japan.
McDonald’s reaffirmed its full-year operating margin guidance in the mid-to-high 40% range. Loyalty sales continued to surge, hitting a record $9 billion for the quarter ($34 billion for the trailing twelve months) as the company remains on track for its 250 million loyalty user target.
Despite a “challenging environment,” CEO Chris Kempczinski highlighted that the company is “fueling momentum” by delivering “everyday value and affordability.” The strategy is working, as McDonald’s appears to be successfully winning over cash-strapped consumers who are pulling back from fast-casual rivals like Chipotle.
Qualcomm’s fiscal Q4 (September quarter) revenue rose 10% Y/Y to $11.3 billion ($510 million beat), with non-GAAP EPS of $3.00 ($0.13 beat). The results were driven by a 13% Y/Y growth in the QCT segment to $9.8 billion.
Handsets revenue was the standout, jumping 14% Y/Y to $7.0 billion, signaling strong demand in the premium Android tier, particularly from Samsung. Automotive revenue hit a record $1.1 billion (+17% Y/Y), and IoT grew 7% to $1.07 billion. Licensing (QTL) revenue fell 7% Y/Y to $1.4 billion.
Despite a $5.7 billion non-cash one-off charge related to a US tax bill, the company generated record free cash flow of $12.8 billion for the full fiscal year and returned $3.4 billion to shareholders in the quarter.
Management issued a blockbuster Q1 FY26 forecast, guiding revenue to $11.8–$12.6 billion and non-GAAP EPS to $3.30–$3.50, both well above consensus. The company expects record QCT Handsets revenue in Q1, driven by new Snapdragon flagship launches. CEO Cristiano Amon highlighted momentum in AI PCs (150+ designs in pipeline), automated driving, and an accelerating push into the AI data center market, with a ramp now expected in FY27.
2025-11-07 21:02:51
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The AI-powered Siri teased back in June 2024 still hasn’t made its debut.
According to Bloomberg’s Mark Gurman, Apple plans to pay Google ~$1 billion a year to use a custom version of Gemini to power next-gen Siri, handling tasks like summaries and planning. The new model would pack 1.2 trillion parameters, compared to roughly 150 billion for the current Apple Intelligence model.
$1 billion is a rounding error for these two Silicon Valley giants. The real story is who Apple chose. After testing models from Anthropic and OpenAI (including ChatGPT), it still went with Google.
Apple’s goal is to replace Gemini with its own model, eventually.
But don’t hold your breath.
Today at a glance:
🕵️ Palantir: Otherworldly Growth
↗️ AMD: Data Center Margins Miss
📱 AppLovin: AI Drives Record Profits
🛍️ Shopify: Growth & AI Costs Soar
🎧 Spotify: Ad Slump Continues
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Palantir smashed expectations, with Q3 revenue jumping 63% Y/Y to $1.18 billion ($90 million beat) and non-GAAP EPS of $0.21 ($0.04 beat). The company’s dollar-based net retention reached a “best in class” 134%.
CEO Alex Karp called the growth “accelerating and otherworldly,” stating the results “make undeniable the transformational impact of using AIP to compound AI leverage.”
The real story: US commercial revenue soared 121% Y/Y to $397 million, while US government revenue climbed 52% to $486 million. US Commercial Total Contract Value rocketed 342% Y/Y to $1.3 billion, setting up a long runway of booked revenue ahead.
Management raised its FY25 guidance again, now targeting ~$4.40 billion in revenue ($150 million raise), including US commercial revenue expected to more than double to $1.43 billion ($131 million raise). Adjusted free cash flow is now projected at ~$2.0 billion ($100 million raise).
Palantir notched a record Rule of 40 score of 114% (up from 94% in Q2) and a record Total Contract Value (TCV) of $2.76 billion (+151% Y/Y). Its AI platform continues to win massive deals, with no signs of slowing down.
But here’s the twist: PLTR is an 11‑bagger (up 1,000%) since it entered our real-money portfolio in January 2024, a testament to the wild investor enthusiasm surrounding AI. Palantir is trading at the top end of the S&P 500’s valuation range. And despite stellar results, the stock fell 15% in the days after earnings, illustrating that much of the upside was already priced in.
Bottom line: Palantir’s growth is otherworldly, but so is its valuation. That requires stellar execution for the foreseeable future.
AMD’s Q3 revenue surged 36% Y/Y to a record $9.2 billion ($500 million beat), while adjusted EPS of $1.20 also beat estimates ($0.03 beat). The results were driven by broad-based demand for EPYC processors, Ryzen CPUs, and Instinct AI accelerators.
↗️ Data Center revenue rose 22% Y/Y to $4.3 billion ($200 million beat), driven by strong demand for 5th Gen EPYC processors and the MI350 AI accelerator ramp. However, the segment’s operating income of $1.1 billion missed expectations, with operating margins falling to 25% (from 29% a year prior).
💻 Client and Gaming revenue was the standout, soaring 73% Y/Y to $4.0 billion. Client revenue hit a record $2.8 billion (+46% Y/Y), fueled by record Ryzen processor sales. Gaming revenue exploded 181% Y/Y to $1.3 billion, driven by higher semi-custom console revenue and strong Radeon GPU demand.
📉 Embedded revenue declined 8% Y/Y to $0.9 billion.
The Q4 outlook beat expectations. AMD guided revenue to ~$9.6 billion (midpoint), roughly $400 million above consensus, with gross margin expected to expand to 54.5%. Notably, this forecast still excludes expected revenue from MI308 shipments to China.
CEO Lisa Su called it an “outstanding quarter” and a “clear step up in our growth trajectory.” Despite the strong top-line and improved guidance, the stock fell as investors likely focused on the data center margin miss and an AI growth trajectory that, while strong, has not yet met the market’s high expectations.
AppLovin is now operating as a pure-play ad-tech company following its app business divestiture.
Q3 revenue surged 68% Y/Y to $1.41 billion ($70 million beat), with the adjusted EBITDA margin reaching an impressive 82%. Even NVIDIA and Visa don’t hit such a high number. GAAP EPS was $2.45 ($0.06 beat), and free cash flow jumped 92% Y/Y to $1.05 billion.
AppLovin’s core ad tech business continued to fire on all cylinders, leading to its recent inclusion in the S&P 500. The AXON self-serve platform launched on October 1st, and management reported very strong early signals, with spend from new advertisers growing ~50% week-over-week.
Management guided for a strong Q4, with revenue of $1.57–$1.60 billion (well ahead of the $1.55 billion consensus) and a stable adjusted EBITDA margin of 82-83%.
The company also announced a new $3.2 billion share buyback authorization. While rumors of regulatory investigations (SEC, state AGs) regarding data practices have created an overhang, the company’s impressive execution, record profitability, and the promising initial ramp of its self-serve platform show accelerating momentum in its core AI-driven ad-tech business.
Shopify’s Q3 revenue jumped 32% Y/Y to $2.84 billion ($80 million beat), and Gross Merchandise Volume (GMV) also surged 32% to $92 billion ($3 billion beat). Growth was strong in North America and internationally, with Merchant Solutions revenue rising 38% Y/Y to $2.15 billion, while Subscription Solutions grew 15% Y/Y to $699 million.
Adjusted EPS was $0.34 (in line with consensus), while GAAP net income fell to $264 million from $828 million a year ago (due to a large one-time gain on equity investments last year). Gross margin compressed to 49% (from 52% a year ago), pressured by higher R&D, marketing, and increased spending on AI infrastructure to support new tools like the “Sidekick” assistant. You could argue that gross margin compression is actually a bullish sign because it shows that merchants are actually using Shopify’s AI tools.
Shopify provided a strong Q4 revenue growth outlook in the “mid-to-high-twenties” percentage range (unchanged), ahead of consensus.
Despite the top-line beat, shares fell slightly post-earnings. Investors are likely focused on the rising AI spending. While the company’s AI tools are driving merchant adoption, investors are now weighing the high costs of the AI pivot against the platform’s resilient, share-gaining growth. AI tailwinds are clear, but now the ROI also comes into question.
Spotify’s Q3 revenue rose 7% Y/Y to €4.3 billion (€40 million beat). The company posted a strong net profit of €0.9 billion, or €3.28 per share (€1.32 beat), a significant turnaround from last quarter’s stock-based-comp-driven loss.
Monthly active users (MAUs) climbed 11% Y/Y to 713 million (3 million beat), and Premium subscribers rose 12% Y/Y to 281 million (in line with expectations).
Engagement is being driven by a major push into video podcasts, which now have 500,000 shows and have been streamed by 390 million users (up 54% Y/Y). Time spent with video content on the platform has more than doubled Y/Y, and a new “ubiquity” strategy—including a new partnership with Netflix—aims to syndicate content off-platform to drive awareness and incremental usage back to Spotify.
Guidance for Q4 was mixed. While MAU and operating income forecasts were ahead of consensus, the Q4 revenue forecast of €4.5 billion was slightly below analyst expectations.
The low-light of the quarter was the continued decline in advertising revenue, which fell 6% Y/Y due to pricing pressure. Management now views 2025 as a “transition year” for ads, with no growth improvement expected until the back half of 2026. The quarter also marks a leadership transition, with CEO Daniel Ek moving to executive chairman, handing the reins to co-CEOs Gustav Söderström and Alex Norström.
That’s it for today!
A massive PRO issue drops tomorrow with over 40 companies included. Berkshire’s cash pile, Robinhood’s crypto miss, the Duolingo meltdown, and much more.
Stay healthy and invest on.
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Author's Note (Bertrand here 👋🏼): The views and opinions expressed in this newsletter are solely my own and should not be considered financial advice or any other organization's views.
Disclosure: I own PLTR, AMD, SHOP, and ABNB in App Economy Portfolio. I share my ratings (BUY, SELL, or HOLD) with App Economy Portfolio members.
2025-11-04 21:03:14
Welcome to the Premium edition of How They Make Money.
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Digest the performance of hundreds of companies in seconds.
Amazon (AMZN) just gave Wall Street the proof it was waiting for.
Last Friday, we discussed AWS as the “most likely beneficiary” of the new deal between Microsoft and OpenAI, after Azure lost its right of first refusal on cloud infrastructure.
Well, well, well. AWS and OpenAI just inked a $38 billion seven-year deal, granting OpenAI access to hundreds of thousands of NVIDIA GPUs, with the option to scale to tens of millions of CPUs for agentic workloads.
The timing couldn’t be better. AWS growth just accelerated to 20% Y/Y, its best performance in nearly three years, showing that Amazon’s aggressive CapEx, now expected to reach $125 billion in FY25, is paying off. The stock jumped over 10% after earnings as investors rewarded tangible progress on AI monetization.
CEO Andy Jassy’s message was simple:
“We’re going to continue to be very aggressive in investing in capacity because we see the demand. As fast as we’re adding capacity right now, we’re monetizing it.”
With AWS revenue scaling past a $132 billion annual run rate, Amazon has turned a narrative of market-share anxiety into one of renewed conviction.
Today at a glance:
Amazon Q3 FY25.
The OpenAI deal implications.
Key quotes from the call.
What to watch moving forward.
Income statement:
Revenue breakdown:
💻 Online stores (37% of overall revenue): Amazon.com +10% Y/Y.
🏪 Physical store (3%): Primarily Whole Foods Market +7% Y/Y.
🧾 3rd party (24%): Commissions, fulfillment, shipping +12% Y/Y.
📢 Advertising (10%): Ad services to sellers, Twitch +24% Y/Y.
📱 Subscription (7%): Amazon Prime, Audible +11% Y/Y.
☁️ AWS (18%): Compute, storage, database, & other +20% Y/Y.
Other (1%): Various offerings, small individually +8% Y/Y.
Revenue rose +13% Y/Y to $180.2 billion ($2.4 billion beat).
Gross margin was 52% (+2pp Y/Y).
Operating margin was 10% (+0pp Y/Y).
AWS: 35% margin (-3pp Y/Y).
North America: 5% margin (-1pp Y/Y).
International: 3% margin (-1pp Y/Y).
EPS $1.65 ($0.39 beat).
Cash flow:
Operating cash flow TTM was $131 billion (+16% Y/Y).
Free cash flow TTM was $15 billion (-69% Y/Y), driven by the operating cash flow growth, offset by a 78% rise in Capex to $116 billion.
Balance sheet:
Cash, cash equivalent, and marketable securities: $94 billion.
Long-term debt: $51 billion.
Q4 FY25 Guidance:
Revenue ~$209.5 billion ($1.4 billion beat).
Operating income $21 to $26 billion (+11% Y/Y in the mid-range).
So, what to make of all this?
☁️ AWS rebounds: AWS revenue rose 20% Y/Y to $33 billion, accelerating from 17% Y/Y in Q2 and the fastest pace since 2022, showing that AI infrastructure demand is translating into growth. Custom chips and new data-center capacity helped offset power and supply constraints. Of course, AWS trails Azure’s 39% and Google Cloud’s 34% growth from lower bases, but it’s still adding the most revenue from a dollar standpoint.
📦 Retail steady: Non-AWS revenue grew 12% Y/Y, including 11% growth in North America and 14% internationally. Prime sign-ups held steady, showing shoppers still see value despite inflation and tariffs.
🏗️ Peak CapEx: Free cash flow dropped sharply as capital expenditures ballooned past $34 billion in a single quarter. Amazon leads the world in capital spending, guiding $125 billion for FY25.
📢 Advertising keeps firing: Ad revenue surged 24% Y/Y to $17.7 billion, outpacing both Google Search and YouTube. Integrations with Roku, Disney, and Prime Video are expanding Amazon’s connected-TV footprint, while a new multi-touch attribution model is sharpening ROI and boosting advertiser confidence. This high-margin segment remains a pillar of the bull case.
📉 Margins hold: Operating income reached $17.4 billion (flat Y/Y), but excluding one-time legal and severance costs, profits would exceed $21 billion. Company-wide margins stayed near 11%, supported by retail efficiencies and ad mix, yet free cash flow collapsed to $14.8 billion as AI-driven capex accelerated.
🔮 Guidance stays grounded: For Q4, Amazon projects $206–213 billion in revenue (+10–13% Y/Y) and $21–26 billion in operating income, implying steady but not explosive growth.
2025-11-02 23:02:23
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🔥 The October report is here!
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✔️ Cut through the noise with clear, concise financial snapshots.
✔️ See revenue trends, profit margins, and key takeaways instantly.
Download the full report below or log in to your account.
Here’s a sneak peek of the 70+ companies included. 👀
🏝️ Travel: Booking, Hilton.
💬 Social: Meta, Reddit, Roblox.
🚗 Automotive: Tesla, GM, Ford.
🍿 Entertainment: Netflix, Roku.
🌮 Franchises: Chipotle, Domino’s.
💊 Biopharma: AbbVie, Merck, J&J.
🔬 Equipment: ASML, Lam Research.
🛩️ Defense: Boeing, Lockheed Martin.
🍫 Food: Hershey, Kraft Heinz, Mondelez.
🏥 Healthcare: UnitedHealth, Intuitive, Align.
🥤 Beverage: Coca-Cola, Constellation, Pepsi.
☁️ Big Tech: Apple, Amazon, Google, Microsoft.
✈️ Airlines: American, Delta, Southwest, United.
📞 Telecom: AT&T, Comcast, Verizon, T-Mobile US.
💳 Payments: Amex, Fiserv, Visa, Mastercard, PayPal.
💰 Wealth: Morgan Stanley, Goldman Sachs, BlackRock.
⚙️ Semis: Arm, Cadence, Intel, KLA, Qualcomm, TSMC, TXN.
🏦 Banks: JPMorgan, BofA, Wells Fargo, Citigroup, Schwab, SoFi.
💻 Software: Atlassian, Confluent, Cloudflare, IBM, SAP, ServiceNow.
Plus Adidas, Coinbase, Etsy, MercadoLibre, P&G, GE Vernova, and more.
2025-11-01 22:02:02
Welcome to the Saturday PRO edition of How They Make Money.
Over 240,000 subscribers turn to us for business and investment insights.
In case you missed it:
📊 Monthly reports: 200+ companies visualized.
📩 Tuesday articles: Exclusive deep dives and insights.
📚 Access to our archive: Hundreds of business breakdowns.
📩 Saturday PRO reports: Timely insights on the latest earnings.
Today at a glance:
📱Apple: Blockbuster Holiday Forecast
🕶️ Meta: Revenue Soars Alongside Spending
💊 Eli Lilly: GLP-1s Defy Headwinds
💳 Visa: Global Spending Stays Strong
💳 Mastercard: Differentiated Services
📱 Samsung: Chip Profit Soars
💊 AbbVie: Immunology Booms
💼 UnitedHealth: Reset in Motion
🦠 Merck: Growth Drivers Sputter
🧑💻 ServiceNow: AI Fuels Blowout
🛩️ Boeing: 777X Slips Again
🏝️ Booking: Momentum Improves
📱 Verizon: Broadband Still the Engine
🔬 KLA: China Rules Bite
🤝 Mercado Libre: Brazil Squeezes Margins
💡 Cadence: AI Drives Beat
📈 Coinbase: Derivatives Surge
👾 Roblox: Losses Overshadow Bookings
🍪 Mondelez: Peak Cocoa Costs
☁️ Cloudflare: Net Retention Rebounds
📦 UPS: Cost Cuts Stoke a Turnaround
💳 Fiserv: Massive Miss Triggers Reset
💳 PayPal: Agentic Commerce Boost
🌯 Chipotle: Consumer Pullback
☁️ Atlassian: AI & Cloud Migration Boost
👽 Reddit: Profitability Surges
👟 Adidas: Brand Heat Overcomes Tariffs
🍫 Hershey: Cocoa Pressures Ease
🏦 SoFi: Records Keep Falling
🌭 Kraft Heinz: Guidance Cut Again
📊 Confluent: Flink Takes Off
📦 Etsy: Changing Guard
🏡 Appfolio: Margins Pinched
Apple’s September quarter (fiscal Q4 FY25) revenue rose 8% Y/Y to $102.5 billion ($220 million beat) with EPS of $1.85 ($0.08 beat). Results were driven by a record Services quarter, though iPhone sales were slightly below consensus.
📱 iPhone sales grew 6% Y/Y to $49.0 billion ($1.0 billion miss). While this reflects Q3’s pull-forward we previously discussed, management cited supply constraints on new iPhone 17 models as the primary limiting factor amid “very strong demand.”
💻 Mac sales were also a bright spot, rising 13% Y/Y to $8.7 billion.
💳 Services grew 15% Y/Y to a record $28.8 billion ($600 million+ beat), crossing the $100 billion annual revenue mark for the first time and continuing to boost Apple’s margin profile.
Despite a $1.1 billion tariff hit on costs (in line with guidance), Gross margin improved slightly at 47%, aided by the revenue mix.
Geographically, China was a weak spot, down 4% Y/Y, though other regions set records.
The muted Q4 was completely overshadowed by Apple’s blockbuster Q1 guidance:
Total Revenue: 10%-12% Y/Y growth (far above consensus).
iPhone Revenue: Double-digit Y/Y growth.
China: Expected to return to growth.
Tariff Costs: Expected to rise to $1.4 billion.
Management highlighted that the strong outlook is supported by heavy R&D investment in AI and Apple Intelligence, which is now driving higher operating expenses. The record Q1 forecast signals powerful demand for the new product cycle, calming any fears of a slowdown.
Meta posted another blowout quarter on the top line, with Q3 revenue surging 26% Y/Y to $51.2 billion ($1.8 billion beat). However, GAAP EPS plummeted to $1.05, massively missing estimates due to a one-time, non-cash $15.9 billion income tax charge related to a new US tax law. Excluding the charge, EPS would have been $7.25, easily beating consensus.
Ad strength remained exceptional, with impressions up 14% Y/Y and average price per ad climbing 10%. Daily active people across the Family of Apps rose 8% Y/Y to 3.54 billion. The core business is firing on all cylinders, funding Meta’s accelerating AI ambitions.
But Wall Street didn’t cheer. The stock slid as AI ambition met cold, hard spending math. Management raised its 2025 CapEx outlook slightly to $70-$72 billion (tightening the bottom end from $66 billion). The real sticker shock came from guidance beyond that: 2026 CapEx will be “notably larger” and total expenses will grow at a “significantly faster percentage rate.”
Zuck doubled down on “aggressively” front-loading AI infrastructure investments to pursue Superintelligence, shaking investor confidence about near-term returns. While Q4 revenue guidance ($56-$59 billion) was strong (+22% Y/Y on the high-end), the open-ended commitment to accelerating AI spending overshadowed the impressive core business performance.
If you’re feeling déjà vu, you’re not alone. Meta faced the same skepticism when it poured billions into the Metaverse. The stock took a hit back then, too — until strong execution turned sentiment around.